Summer is fast approaching, and with the weather change, businesses will soon be hosting office picnics, award ceremonies, and holiday parties. As is the only constant in tax matters, there are changes (again) in what meals the IRS will allow small business owners to deduct at 100% or 50%. Here in our Chicago South Loop Tax Preparation and our Homewood Il, Tax preparation offices, since you no longer can deduct all restaurant meals at 100%, we’ve done the research for you so that you can plan accordingly when organizing an office outing, having a business lunch, or providing meals for an employee meeting.
As you may already know, there have been some major changes to the business meal deduction for 2023 and beyond. The deduction for business meals has been reduced to 50 percent, a significant change from the previous 100 percent deduction for business meals in and from restaurants, which was applicable only for the years 2021 and 2022 due to Covid.
To help you better understand what you can deduct, please see the table below:
| Amount Deductible for Tax Year 2023 and Beyond | |||
| Description | 100% | 50% | Zero |
| Restaurant meals with clients and prospects | X | ||
| Entertainment such as baseball and football games with clients and prospects | X | ||
| Employee meals for the convenience of the employer, served by an in-house cafeteria | X | ||
| Employee meals for required business meetings, purchased from a restaurant | X | ||
| Meal served at the chamber of commerce meeting held in a hotel meeting room | X | ||
| Meal consumed in a fancy restaurant while in overnight business travel status | X | ||
| Meals cooked by you in your hotel room kitchen while traveling away from home overnight | X | ||
| Year-end party for employees and spouses | X | ||
| Golf outing for employees and spouses | X | ||
| Year-end party for customers | X | ||
| Meals made on premises for the general public at a marketing presentation | X | ||
| Team-building recreational event for all employees | X | ||
| Golf or theater outing or football game with your best customer | X | ||
| Meal with a prospective customer at a country club following your non-deductible round of golf | X | ||
Although we’ve given you the basics, this is not an all-inclusive article. Should you have questions, or need business tax preparation, business entity creation, or business compliance assistance please contact us online, or call our office at 855-743-5765. Do you owe the IRS, or your state back taxes? Do you have unfiled tax returns? Is the IRS threatening to garnish your paycheck, or levy your bank account? Are you ready to get back on track with the IRS? Howard Tax Prep LLC will help you get back on track with the IRS, get into a settlement, or setup a payment with the IRS. Reach out to us now! Make sure to join our newsletter for more tips on reducing taxes, and increasing your wealth.
Author information: Trudy M. Howard is a managing member of Howard Tax Prep LLC, a south loop of Chicago tax preparation and accounting office.
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